Yellen Concerned about Israel's Threats to Cut off Palestinian Banks

US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
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Yellen Concerned about Israel's Threats to Cut off Palestinian Banks

US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)

US Treasury Secretary Janet Yellen said on Thursday she was concerned by a threat from Israel to cut off Palestinian banks from their Israeli correspondent banks, a move that would close a critical lifeline for the Palestinian economy.

Yellen told a news conference ahead of a G7 finance ministers meeting beginning on Friday that the US and its partners "need to do everything possible to increase humanitarian assistance to Palestinians in Gaza, to curtail violence in the West Bank, and to stabilize the West Bank's economy."

She said she would bring up the issue at the meeting of the Group of Seven industrial democracies in the lakeside resort town of Stresa in northern Italy. "I expect other countries to express concern about the impact of such a decision on the West Bank economy. I think this would have a very adverse effect also on Israel."

Israel's Finance Minister Belazel Smotrich has said he cannot renew a waiver that expires on July 1 which allows Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority, Reuters reported.

In a post on the X social media site reacting to Yellen's comments, Smotrich said he could not sign the waiver because Palestinians are still funding "terrorism" and Israeli banks can be sued for violating anti-terrorism financing laws.

"The financial system of the Palestinian Authority is infected with terrorism up to its neck," said Smotrich, a member of a far-right Israeli coalition partner that supports settlements in the West Bank. He called critics of the policy "hypocrites."

Yellen said it was important to keep open the Israeli-Palestinian correspondent banking relationships to allow battered economies in the West Bank and Gaza to function and help ensure security.

"These banking channels are critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2 billion a year in exports on which Palestinian livelihoods depend," Yellen said.

She added that Israel's withholding of revenues collected on behalf of the Palestinian authority also threatens the West Bank's economic stability.

"My team and I have also engaged directly with the Israeli government to urge action that would bolster the Palestinian economy and, I believe, Israel's own security," Yellen said.

Financial tensions between Israel and the US have risen over US sanctions imposed on Israeli settlers in the West Bank.



Hezbollah Fires New Barrage at Israel, Which Vows to Hit Back

Hezbollah members take part in a military exercise during a media tour organized for the occasion of Resistance and Liberation Day, in Aaramta, Lebanon, May 21, 2023. (Reuters)
Hezbollah members take part in a military exercise during a media tour organized for the occasion of Resistance and Liberation Day, in Aaramta, Lebanon, May 21, 2023. (Reuters)
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Hezbollah Fires New Barrage at Israel, Which Vows to Hit Back

Hezbollah members take part in a military exercise during a media tour organized for the occasion of Resistance and Liberation Day, in Aaramta, Lebanon, May 21, 2023. (Reuters)
Hezbollah members take part in a military exercise during a media tour organized for the occasion of Resistance and Liberation Day, in Aaramta, Lebanon, May 21, 2023. (Reuters)

Lebanon’s Iran-backed Hezbollah group said it fired a new wave of rockets and drones at the Israeli army on Thursday, after an Israeli strike killed one of its senior commanders, AFP reported.
It was Hezbollah’s largest simultaneous attack in near-daily cross-border fire between it and the Israeli army since its ally Hamas’s October 7 attack on Israel triggered the Gaza war.
Hezbollah fighters launched “an attack with rockets and drones, targeting six barracks and military sites” while simultaneously flying “squadrons of explosive-laden drones” at three other Israeli bases, the group said in a statement.
One of the targets included an Israeli base that Hezbollah said housed an intelligence headquarters “responsible for the assassinations.”
Hezbollah said the attacks were “part of the response to the assassination” of Hezbollah commander Taleb Abdallah on Tuesday.
The Israeli army said about “40 projectiles were launched toward the Galilee and Golan Heights area,” adding most were intercepted while others ignited fires.
The Israeli government vowed to respond strongly to all Hezbollah attacks.
“Israel will respond with force to all aggressions by Hezbollah,” government spokesman David Mencer said during a press briefing.
“Whether through diplomatic efforts or otherwise, Israel will restore security on our northern border,” he added.
In recent weeks, cross-border exchanges have escalated, with Hezbollah stepping up its use of drones to attack Israeli military positions and Israel hitting back with targeted strikes against the militants.
On Wednesday, top Hezbollah official Hashem Safieddine vowed the group would “increase the intensity, strength, quantity and quality of our attacks,” while speaking at Abdallah’s funeral.
The Israeli army confirmed it carried out the strike that “eliminated” Abdallah on Tuesday, describing him as “one of Hezbollah’s most senior commanders in southern Lebanon.”
A Lebanese military source said he was the “most important” Hezbollah commander to have been killed since the start of the war.
The cross-border violence has killed at least 468 people in Lebanon, most of them fighters but also including 89 civilians, according to an AFP tally.
Israeli authorities say at least 15 Israeli soldiers and 11 civilians have been killed.